Shriram Finance To Sell Housing Finance Arm To Warburg Pincus For Rs 4,630 Crore

Shriram Finance Ltd. on Monday announced the sale of its housing finance arm, Shriram Housing Finance, to Warburg Pincus. The Rs 4,630-crore transaction will see the latter acquiring the stake through its affiliate, Mango Crest Investment Ltd., subject to regulatory approvals.

To date, Shriram Finance maintained a controlling interest in its housing finance subsidiary, with Mauritius-based private equity firm Valiant Partners LP holding the remaining ownership. Valiant will also fully divest its equity stake to the company, according to an exchange filing on Monday.

Shriram Finance holds approximately 84.8% stake in the housing finance business, with Valiant holding the remaining portion.

The anticipated timeline for the completion of this transaction is Feb. 7, 2025. Upon its conclusion, Shriram Housing Finance will operate as a standalone entity.

The current management team of the housing finance company, including the Managing Director and Chief Executive Officer Ravi Subramanian, is expected to remain in their roles.

Prior to this, media reports indicated that both Warburg Pincus and Bain Capital were leading contenders for this deal. Additionally, the parent company was exploring options to sell controlling stake in the housing finance business.

In the quarter-ended March, Shriram Housing Finance's net profit stood at Rs 62 crore, up 67% year-on-year. Its assets under management was reported at Rs 13,761.68 crore, up 14.4% on a quarterly basis and 71% year-on-year.

The total loan portfolio on books stood at Rs 10,842.03 crore, up 56.4% year-on-year. Net interest margin was reported at 7.56% in Q4, as compared with 8.20% in Q3.